TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court upholds exemption from Basic Customs Duty under DFIA scheme, dismisses PIL challenging revenue leakage.</h1> <h3>Sri Subhankar Bhowmik Versus Union of India, The Asstt. Commissioner of Customs, Agartala, The Additional Director General of Foreign Trade, Kolkata</h3> Sri Subhankar Bhowmik Versus Union of India, The Asstt. Commissioner of Customs, Agartala, The Additional Director General of Foreign Trade, Kolkata - TMI Issues Involved:1. Failure to deny exemption from Basic Customs Duty under DFIA despite non-fulfillment of conditions.2. Issuance of Transferrable DFIAs contrary to Foreign Trade Policy.3. Interpretation of the condition (iii) of Custom Notification No.19 of 2015.4. Application of quality, technical characteristics, and specifications in DFIA.5. Alleged revenue leakage due to improper application of DFIA conditions.6. Validity of past judgments and precedents regarding DFIA.Detailed Analysis:1. Failure to Deny Exemption from Basic Customs Duty under DFIA Despite Non-fulfillment of Conditions:The petitioner argued that the officers of the respondent-Union of India have failed to deny exemption from Basic Customs Duty to goods imported under Transferrable DFIA, despite non-fulfillment of the condition contained in the first proviso to condition (iii) of Custom Notification No.19 of 2015. The petitioner contended that the officers did not enforce the requirement of establishing a close nexus for the quality, technical characteristics, and specifications of the imported material and the material used in the export product, leading to revenue leakage.2. Issuance of Transferrable DFIAs Contrary to Foreign Trade Policy:The petitioner sought directions for the respondents to initiate action against officers who issued Transferrable DFIAs contrary to the provisions and spirit of the Foreign Trade Policy. The petitioner emphasized that the officers should restrict duty-free import entitlement under any Transferrable DFIA already issued, only as per specific material actually used with declared quality, technical characteristics, and specifications, notwithstanding Paragraph 4.27(i) of FTP and the Standard Input Output Norms.3. Interpretation of Condition (iii) of Custom Notification No.19 of 2015:The subject condition (iii) for exemption from Basic Customs Duty under Custom Notification No.19 of 2015 specifies that the description, value, and quantity of materials imported must be mentioned in the authorization and within specified limits. The petitioner argued that the first proviso to condition (iii) should be read to include quality, technical characteristics, and specifications, similar to the second proviso which applies to sensitive inputs specified in Paragraph 4.30 of FTP.4. Application of Quality, Technical Characteristics, and Specifications in DFIA:The court clarified that the words 'same quality, technical characteristics and specification' are categorically used in Paragraph 4.30 of FTP and the second proviso to condition (iii) of the Customs Notification No.19 of 2015, but are absent in Paragraph 4.12 of FTP and the first proviso to condition (iii). Therefore, these further words cannot be read into Paragraph 4.12 and the first proviso to condition (iii). The requirement of declaring these particulars applies only to sensitive inputs specified in Paragraph 4.30.5. Alleged Revenue Leakage Due to Improper Application of DFIA Conditions:The petitioner contended that the officers' failure to apply the provisions and conditions with a restrictive meaning resulted in significant revenue leakage. The court found no merit in this contention, stating that the officers reasonably construed the provisions of the FTP and conditions of the Notification as per the plain language thereof.6. Validity of Past Judgments and Precedents Regarding DFIA:The petitioner cited judgments from various High Courts and Tribunals which construed the DFIA Scheme contrary to the petitioner's contentions. The court referred to the judgment of the Hon'ble Allahabad High Court in Sachin Pandey vs. UOI and the judgment of the Bombay High Court in Shah Nanji Nagsi Exports Pvt. Ltd. vs. UOI, which upheld the current interpretation of the DFIA Scheme. The court found no reason to deviate from these precedents and dismissed the petitioner's arguments.Conclusion:The court concluded that the contentions and prayers of the petitioner were without merit. The officers of the respondents reasonably construed the provisions of the FTP and conditions of the Notification. The court dismissed the PIL, stating that no action was warranted against the officers of the respondent-Union of India, and upheld the validity of past judgments and precedents regarding the DFIA Scheme.
TaxTMI 